Dos and don’ts of living on rent, from a tenant’s perspective

Life as a tenant is not easy, as it involves hunting for a house, negotiating the rent, dealing with landlords and possibly, having to relocate every few years. Housing.com News spoke to a few tenants from across India, on the lessons that they learnt from living in rental accommodations

Abhijeet Kasliwal

Marketing head, Kolkata

Dos and don’ts of living on rent, from a tenant’s perspective Abhijeet Kasliwal

“I have been living on rent for five years and it has been a learning experience. After completing my higher studies in Kolkata, I shared an accommodation with my college friend. We got the house of our choice in one of Kolkata’s best complexes, after two weeks of hunting online and with the help of brokers. However, after a few months, we started facing some plumbing problems in the house and when we informed the landlord, he started blaming us. So, we decided not to renew the contract and shift, once it lapsed,” says Kasliwal, who hails from Rajasthan.

Later, the duo had a pleasant stay at a new place for two years, after which Kasliwal’s friend got married and moved out. Kasliwal recalls that he faced issues with returning home late, in one of the houses he lived in and the society was also against bachelor tenants. Hence, he decided to leave the society in a few months. “One meets different types of landlords and eventually, one learns to deal with them. There have been problems regarding maintenance of the fittings, payment issues during demonetisation, due to the shortage of cash, returning of the security deposit while moving out, unexpected visits by landlords, etc., to name a few. I thinks it is advisable to share the room with a friend, so there is no dispute regarding petty issues. Moreover, if you have a roommate who is a friend, it is a blessing, as he will be there for you if you fall ill,” Kasliwal advises.

“In the initial years, the location of my rental flat was not a priority. Now, with my work schedule becoming busy, I prefer to stay close to my workplace, as I do not wish to waste time commuting. For a person like me, who has just started his career, I would not prefer to spend more than 30%-40% of my salary on rent. One should always read the terms and conditions of the leave and licence agreement carefully. Ideally, you should be allowed to accommodate your parents, relatives, friends, etc., if they visit. One should be allowed to terminate the lease before the expiry of the agreement, if necessary, with prior notice. This notice period should be equal for both, the tenant and the landlord. The security deposit should be refunded before, or on the day of moving out of the premises,” he adds.

See also: Rent Control Act: How it safeguards the interests of tenants and landlords

Abhinit Ranjan

Senior corporate communication executive, Delhi

Dos and don’ts of living on rent, from a tenant’s perspective Abhinit Ranjan

“I have always had a bittersweet relationship with my landlords, over the years. The most common problems, pertained to renovation of the house and fixing of broken things. I now get the minor repairs done on my own and inform the landlord, to ensure that the expense it is adjusted from the rent,” states Ranjan who hails from Chapra, in Bihar and is currently living in Delhi.

Ranjan, who has lived on rent in Patna, Lucknow, Mumbai and Delhi, recalls some horrid experiences he faced: “I was once left stranded in the middle of the night by a landlord in Delhi, because I was unable to pay the rent on time, even though the delay was of only one day. One landlord wanted rent only in cash and refused to even share her PAN card or make a proper agreement draft.” Another landlord in Noida, however, was a gentleman, he says. “He never had any problems with parties and playing guitar at home. I love playing the guitar and at times, I have to be careful not to disturb others neighbours with my music. Also, when I resigned from a job and my salary was delayed, I was forced to pay the rent a few weeks late. He understood my situation and was cooperative,” Ranjan shares.

Ranjan, who wants to shift into a house with his girlfriend, points out that “Convincing landlords to rent a house to a live-in couple, is not easy. In India, all said and done, landlords do not like to rent out their houses to live-in couples.”

Tenants must also be responsible on their part and should take care of the house well, he insists. “Respect the landlord’s property and do not damage any walls or furniture. Tenants have to follow certain obligations under the landlord-tenant law. If a landlord sees that his house is properly maintained, he too will like you. The relationship between the landlord and the tenant needs to be mutually respectful and transparent,” he says.

Alison Dias

Public relations professional, Mumbai

Dos and don’ts of living on rent, from a tenant’s perspective Alison Dias

“I have been living on rent, since I got married in January 2018. As my husband, Elroy, is a seafarer and travels for months, we decided to look for a place that is close to my parent’s house and has good security,” Dias explains, adding that it took a few months to find a house that met their requirements.

“We found the house that we are living in, through a popular property website. However, most portals have incorrect information – for example, there were many properties that were not available but still showed as available on the site, or the rent amount was different from what was featured on the websites, etc.,” she recalls.

Dias maintains that as long as the building is safe and secure, one can do live peacefully. “We have been living in this house for almost a year and our landlord is kind and accommodating. The house did not have a safety door and when we requested for it, our landlord had it made,” she says. “It is crucial to have a clear rental agreement, where all the housing society rules are listed out, so as to benefit both parties (the tenant and the landlord). The responsibility of utility charges, such as electricity and gas, must be mentioned. Contracts should be legally registered and signed by both the parties and there should not be any hidden clauses in the agreement,” she concludes.


Dos and don’ts for renting out your house

Although it may be relatively easy to rent out one’s house and earn regular income, there are a few things that one should be careful about before finalising a deal

April 29, 2019: The rental housing market has evolved over the years, with new legislations and registration procedures that help to protect landlords against the potential risk of tenants violating terms and conditions of the rental agreement.

 

 

Rental rate

The first step for landlord, is to identify the prevailing rental rates in the micro-market where the property is located.

“It is important to understand how much rent you can expect from the asset. Market your property through advertisements in local papers, online advertisements, property agents, etc. Do not compromise on giving basic amenities and make sure that your house is free from any major repairs and leakage problems. In short, make the house completely tenantable and create a value for your home,” suggests Kanchan Krishnan, director- Chennai, Knight Frank (India) Pvt Ltd.

 

Documentation required for renting out an apartment

Landlords should also have all the necessary documents in place, to ensure that their property remains in safe hands. Tenants, on their part, should check the title documents, to ascertain that the person renting out the house is the owner of the house.

“If the place that is being rented out, is a part of a cooperative society or colony, then, the share certificates also need to checked. A no-objection certificate from the association, which specifies the conditions on which the house would be rented, may also be needed. Documents, like electricity bill, PAN card, Aadhar Card, etc., should also be kept handy, as they are used as ID proofs,” adds Amit Wadwhani, director of Sai Estate Consultant.

See also: Dos and don’ts for buying a property to earn rental income

 

Type of rent agreements

Always take a security deposit from the tenant, which is between one to six months’ rent, to ensure that you have a backup if the tenant does not pay the rent. A rent agreement, which is a legal document that binds the landlord and the tenant to comply with the conditions, is then made. The agreement should be drafted after consultation with a lawyer, to avoid any future issues.

“The landlord should carefully select the type of agreement that needs to be drafted with the tenant. It can either be a ‘tenancy agreement’ or a ‘leave and license’ agreement. In states where the Rent Control Act is prevalent, such as Maharashtra, Gujarat, etc., landlords prefer a leave and license agreement, as it curbs the rights and liabilities of tenants,” explains Shubika Bilkha, business head at the Real Estate Management Institute (REMI).

 

Registration of the agreement

“The agreement should be registered and stamp duty paid. In Maharashtra, the stamp duty on a leave and license agreement is 0.25% of the entire rent amount, whereas, for a lease agreement, it is like a sale deed (5% of the entire rent amount),” states Wadhwani.

“The agreement should include details about the rent/license fee and the frequency of the rental increase, security deposit details including its refund, common area maintenance charges, the tenants’ responsibilities, repairs and details on who bears the associated costs. Also, the responsibility of utilities charges, such as electricity and gas, must also mentioned, in addition to the termination clause and notice period before termination,” says Bilkha.

 

Tenure of rental lease

Normally the rental tenure is of 11 months which is ideal for smooth transactions. Leave and license agreements should not be more than 3 years, adds Wadhwani. “Some agreements have a lock-in clause, which states that a tenant cannot leave the rented property or terminate the agreement for a specified period. If the tenant leaves the rented property, he/she would be required to continue to pay the rent until the lock-in period is over. To deal with unwanted situations the landlord should safeguard himself by a clause, wherein, he has the right to give a notice to the tenant to vacate the place, even in lock in period,” Wadhwani advises.

Prashant Golecha, a Mumbai-based public relations professional, who has been renting out his house in Malad says, “Rent is a good source of monthly income. Always hire a trustworthy broker for your deals. Also, police verification of the tenant helps and most housing societies now insist on this. In the last 8 years, I faced a problem only once.”

 

Things that landlords should keep in mind, while renting one’s house:

  • Always do a background check of the tenant, his family, marital status, profession and workplace.
  • Try to verify the tenant’s income and check their debt ratio.
  • After the agreement is ready, a police verification should be done, which requires both the parties to be present.

 

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